Airsculpt Technologies, Inc.
For the period ended Jun 30, 2025. Filed Aug 1, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 1, 2025
AIRS$0.53-62.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001870940-25-000021
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001870940-25-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 92 previous paragraphs and 105 current paragraphs.
64 unchanged; 24 reworded; 11 added; 2 removed; 2 previous and 6 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
For the three and six months ended June 30, 2025, we performed 3,392 and 6,468 cases, respectively, compared to 3,949 and 7,695 for the three and six months ended June 30, 2024, respectively. For the three and six months ended June 30, 2025, we generated approximately $44.0 million and $83.4 million of revenue, respectively, compared to $51.0 million and $98.6 million for the three and six months ended June 30, 2024, respectively. This represents approximately 14% decline in revenue for the three months ended June 30, 2025 over the same period in the prior year and approximately 15% decline in revenue for the six months ended June 30, 2025 over the same period in the prior year.
Current report
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources. General and administrative expenses were approximately $12.8 million and $21.2 million for the three months ended June 30, 2025 and 2024, respectively. This decrease relates to a $3.5 million decrease in stock compensation expense. Additionally, the prior year period included $3.7 million in severance costs, with no comparable expense in the current period. We have also implemented a cost reduction program that is estimated to eliminate approximately $3.0 million in annual overhead costs and contracted expenses.
Current report
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Current report
Revenue—Our revenue decreased $15.2 million, or 15.5%, compared to the same period in 2024. The decrease is primarily attributed to weaker than expected performance across the broader aesthetics and high-end retail industries.
Current report
Selling, General and Administrative Expenses—Selling, general and administrative expenses decreased $5.6 million, or 11.2%, for the six months ended June 30, 2025 compared to the same period in 2024. This decrease is related to a $4.9 million decrease in advertising costs, $3.7 million decrease in severance expense, and $0.9 million decrease payroll costs, offset by a $4.5 million increase in our equity-based compensation expense due to the prior year expense reversal related to certain PSUs (see Note 6 to the consolidated financial statements included in this Quarterly Report on Form 10-Q for further discussion) partially offset by additional expenses we incurred for marketing and corporate support as we grow our center count through de novo expansion and providing support for our centers. Selling, general and administrative expenses as a percent of revenue were 53.3% and 50.7% for the six months ended June 30, 2025 and 2024, respectively.
Current report
Interest Expense, net—Interest expense increased to $3.2 million from $3.0 million for the six months ended June 30, 2025 and 2024, respectively.
Current report
2025 Underwritten Follow-On Equity Offering
Current report
On June 9, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Leerink Partners LLC (“Leerink Partners”), to issue and sell 3,160,000 shares (the “Firm Shares”) of the Company’s common stock to Leerink Partners, in an underwritten registered public offering (the “Offering”), at a price of $3.80 per share. Pursuant to the Underwriting Agreement, the Company also granted Leerink Partners a 30-day option to purchase up to an additional 474,000 shares of the Company's common stock (the “Additional Shares,” and together with the Firm Shares, the “Shares”), at the same price per share as the Firm Shares. Leerink Partners exercised in full its option to purchase the Additional Shares on June 10, 2025. Vesey Street Capital Partners, L.L.C., which is affiliated with two directors and is the largest stockholder of the Company, purchased an aggregate of 1,000,000 Shares in the Offering on the same terms and conditions as purchases by the public in the Offering.
Current report
The Offering closed on June 11, 2025, and the Company received net proceeds of approximately $13.8 million from the sale of 3,634,000 Shares, which included the 474,000 Additional Shares, after deducting estimated offering expenses. The Company used the net proceeds from the Offering for the prepayment of a portion of the Company’s outstanding indebtedness under its existing credit agreement and the remainder of the net proceeds from the Offering for general corporate purposes, including working capital and other business opportunities.
Current report
The Offering was pursuant to a prospectus supplement dated June 9, 2025, filed with the SEC in connection with the Company’s shelf registration statement on Form S-3 (File 333-285825), filed with the SEC on March 14, 2025 and declared effective on March 24, 2025 and the related prospectus dated March 14, 2025.
Current report
On June 13, 2025, the Company made a $10.0 million principal payment on the term loan in accordance with the Third Amendment using proceeds from its underwritten public offering completed on June 11, 2025.
Removed paragraphs (2)
Previous report
For the three months ended March 31, 2025, we performed 3,076 cases and generated approximately $39.4 million of revenue, compared to 3,746 cases and $47.6 million in revenue for the three months ended March 31, 2024. This represents approximately 17% decline in revenue for the three months ended March 31, 2025 over the same period in the prior year.
Previous report
Overview—Our financial results for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 reflect the addition of five de novo centers which increased our procedure rooms by ten.
Reworded paragraphs (24)
Previous wording
AirSculpt is an experienced national provider of body contouring procedures delivering a premium consumer experience. At AirSculpt, we provide custom body contouring using our proprietary AirSculpt® method that removes unwanted fat in a minimally invasive procedure, producing dramatic results. We now deliver our AirSculpt® procedures through a nationwide footprint of 32 centers across 20 states, Canada, and the United Kingdom as of May 2, 2025.
Current wording
AirSculpt is an experienced national provider of body contouring procedures delivering a premium consumer experience. We provide custom body contouring using our proprietary AirSculpt® method that removes unwanted fat and tightens skin in a minimally invasive procedure, producing dramatic results. We deliver our AirSculpt® procedures through a nationwide footprint of 32 centers across 20 states, Canada and the United Kingdom as of August 1, 2025.
Previous wording
•enhancing our customer experience to ensure we consistently provide premium results, with initiatives that are in development and expected to rollout in the second half of fiscal year 2025 and into fiscal year 2026;
Current wording
•enhancing our customer experience to ensure we consistently provide premium results, with initiatives that are in development and expected to roll out in the second half of fiscal year 2025 and into fiscal year 2026;
Previous wording
•launching expanded consumer financing offerings across all of our centers by the end of the second quarter of fiscal year 2025; and
Current wording
•launching expanded consumer financing offerings across all of our centers in the first half of fiscal year 2025; and
Previous wording
•focusing on new product innovation where we believe there is an opportunity to introduce new services that would allow us to expand our customer reach, leverage existing infrastructure and surgical expertise, and generate incremental revenues, including by launching a pilot skin tightening procedure as a standalone offering.
Current wording
•focusing on new product innovation and introducing new services to expand our customer reach, leverage existing infrastructure and surgical expertise, and generate incremental revenues, including by expanding our pilot program of our skin tightening procedure as a standalone offering.
Previous wording
We define Adjusted EBITDA as net (loss)/income excluding depreciation and amortization, net interest expense, income tax (benefit)/expense, restructuring and related severance costs, loss on disposal of long-lived assets, and equity-based compensation.
Current wording
We define Adjusted EBITDA as net (loss)/income excluding depreciation and amortization, net interest expense, income tax (benefit)/expense, restructuring and related severance costs, loss/(gain) on disposal of long-lived assets, and equity-based compensation.
Previous wording
We define Adjusted Net Income as net (loss)/income excluding restructuring and related severance costs, loss on disposal of long-lived assets, equity-based compensation and the tax effect of these adjustments.
Current wording
We define Adjusted Net Income as net (loss)/income excluding restructuring and related severance costs, loss/(gain) on disposal of long-lived assets, equity-based compensation and the tax effect of these adjustments.
Previous wording
Revenue—Our revenue decreased $8.2 million, or 17.3%, compared to the same period in 2024. The decrease is primarily attributed to weaker than expected performance across the broader aesthetics industry.
Current wording
Revenue—Our revenue decreased $7.0 million, or 13.7%, compared to the same period in 2024. The decrease is primarily attributed to weaker than expected performance across the broader aesthetics industry.
Previous wording
Cost of Service—Our cost of services decreased $2.1 million, or 11.6%, compared to the same period in 2024. The percentage decrease in cost of service is driven by the decrease in cases compared to the same period in 2024. Cost of service was 40.5% and 37.9% as a percentage of revenue for the three months ended March 31, 2025 and 2024, respectively. This is primarily due to not being able to leverage certain fixed costs within cost of service like rent and certain nursing costs.
Current wording
Cost of Service—Our cost of services decreased $1.6 million, or 8.6%, compared to the same period in 2024. The percentage decrease in cost of service is driven by the decrease in cases compared to the same period in 2024. Cost of service was 39.1% and 36.9% as a percentage of revenue for the three months ended June 30, 2025 and 2024, respectively. This is primarily due to not being able to leverage certain fixed costs within cost of service like rent and certain nursing costs.
Previous wording
Selling, General and Administrative Expenses—Selling, general and administrative expenses increased $6.0 million, or 38.2%, for the three months ended March 31, 2025 compared to the same period in 2024. This increase is related to an increase in stock compensation. During the three months ended March 31, 2024, we reversed stock compensation expense of approximately $10.4 million related to reassessing the probability of achieving the performance target on certain performance based stock unit awards. Selling, general and administrative expenses as a percent of revenue was at 55.3% and 33.1% for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Selling, General and Administrative Expenses—Selling, general and administrative expenses decreased $11.6 million, or 33.9%, for the three months ended June 30, 2025 compared to the same period in 2024. This decrease relates to a $3.4 million reduction in advertising costs, $3.5 million decrease in stock compensation expense, as well as a $3.7 million reduction in severance costs. Selling, general and administrative expenses as a percent of revenue was at 51.5% and 67.2% for the three months ended June 30, 2025 and 2024, respectively.
Previous wording
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Total selling expenses were approximately $9.6 million and $11.2 million for the three months ended March 31, 2025 and 2024, respectively. This decrease is primarily related to a decrease in advertising spend associated with brand awareness initiatives. Our customer acquisition costs were approximately $3,130 and $2,990 per customer in the three months ended March 31, 2025 and 2024, respectively. Selling expenses as a percentage of revenue may fluctuate from quarter to quarter based on the timing and scope of our initiatives and the related impact to our revenue. We have also implemented a cost reduction program that is estimated to eliminate approximately $3.0 million in annual overhead costs and contracted expenses, and have paused de novo center and new procedure room openings, which is expected to have a favorable impact on selling expenses.
Current wording
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Total selling expenses were approximately $9.9 million and $13.1 million for the three months ended June 30, 2025 and 2024, respectively. This decrease is primarily related to a decrease in advertising spend associated with brand awareness initiatives. Our customer acquisition costs were approximately $2,905 and $3,325 per customer in the three months ended June 30, 2025 and 2024, respectively. Selling expenses as a percentage of revenue may fluctuate from quarter to quarter based on the timing and scope of our initiatives and the related impact to our revenue. We have also paused de novo center and new procedure room openings, which is expected to have a favorable impact on selling expenses.
Previous wording
Depreciation and Amortization—Depreciation and amortization increased to approximately $3.2 million for the three months ended March 31, 2025 compared to $2.8 million for the same period in 2024. This increase is the result of having five additional de novo centers during the three months ended March 31, 2025 as compared to the 2024 period.
Current wording
Depreciation and Amortization—Depreciation and amortization increased to approximately $3.2 million for the three months ended June 30, 2025 compared to $2.9 million for the same period in 2024. This increase is the result of having five additional de novo centers during the three months ended June 30, 2025 as compared to the 2024 period.
Previous wording
Income Tax Expense— Our effective tax rate is 11.4% and 36.4% for the three months ended March 31, 2025 and 2024, respectively. The main driver of the difference between the effective and statutory rate is non-deductible executive compensation under Section 162(m) of the Internal Revenue Code.
Current wording
Income Tax Expense— Our effective tax rate is 23.8% and 50.6% for the three months ended June 30, 2025 and 2024, respectively. The main driver of the difference between the effective and statutory rate is non-deductible executive compensation under Section 162(m) of the Internal Revenue Code.
Previous wording
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources. General and administrative expenses were approximately $12.1 million and $4.6 million for the three months ended March 31, 2025 and 2024, respectively. This increase is primarily due to the prior period reversal of $10.4 million in stock compensation expense.
Current wording
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources. General and administrative expense were approximately $25.0 million and $25.7 million for the six months ended June 30, 2025 and 2024, respectively. We have also implemented a cost reduction program that is estimated to eliminate approximately $3.0 million in annual overhead costs and contracted expenses.
Previous wording
We believe that the cash expected to be generated from operations and from our at-the-market offering program will be sufficient for our working capital requirements, liquidity obligations, and payments due under our existing credit facilities for at least the next 12 months.
Current wording
We believe that the cash expected to be generated from operations will be sufficient for our working capital requirements, liquidity obligations, and payments due under our existing credit facilities for at least the next 12 months.
Previous wording
As of March 31, 2025, we had $5.6 million in cash and cash equivalents with no availability under our revolving credit facility. We do not have any letters of credit outstanding as of March 31, 2025.
Current wording
As of June 30, 2025, we had $8.2 million in cash and cash equivalents and an available amount of $5.0 million under our revolving credit facility. We do not have any letters of credit outstanding as of June 30, 2025.
Previous wording
As of March 31, 2024, we had $11.0 million in cash and cash equivalents and an available amount of $5.0 million under our revolving credit facility. We did not have any letters of credit outstanding as of March 31, 2024.
Current wording
As of June 30, 2024, we had $9.9 million in cash and cash equivalents and an available amount of $5.0 million under our revolving credit facility. We did not have any letters of credit outstanding as of June 30, 2024.
Previous wording
The primary source of our operating cash flow is the collection of patient payments received prior to performing surgical procedures. For the three months ended March 31, 2025, our operating cash flow decreased by $2.5 million compared to the same period in 2024. The decrease is primarily attributed to weaker than expected revenue performance during the three months ended March 31, 2025 as compared to the prior year period. At March 31, 2025, we had a working capital deficit of $(11.5) million compared to $(11.5) million at December 31, 2024.
Current wording
The primary source of our operating cash flow is the collection of patient payments received prior to performing surgical procedures. For the six months ended June 30, 2025, our operating cash flow decreased by $1.0 million compared to the same period in 2024. The decrease is primarily attributed to weaker than expected revenue performance during the six months ended June 30, 2025 as compared to the prior year period. At June 30, 2025, we had a working capital deficit of $(9.4) million compared to $(11.5) million at December 31, 2024.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2025 and 2024 was $1.9 million and $1.6 million, respectively. Investing activities in the three months ended March 31, 2025 relate primarily to final payments on our White Plains, NY location that opened in December 2024 and maintenance capital expenditure. Investing activities during the three months ended March 31, 2024 were attributable to the preparation for the opening of our 2024 de novo locations.
Current wording
Net cash used in investing activities for the six months ended June 30, 2025 and 2024 was $2.2 million and $5.6 million, respectively. Investing activities in the six months ended June 30, 2025 relate primarily to final payments on our White Plains, NY location that opened in December 2024 and maintenance capital expenditure. Investing activities during the six months ended June 30, 2024 were attributable to the preparation for the opening of our 2024 de novo locations.
Previous wording
Net cash used in financing activities during the three months ended March 31, 2025 was $1.6 million. During the three months ended March 31, 2025, we made principal payments on our debt of $1.1 million, payments for debt modification of $0.2 million and made payments of taxes withheld through vested equity-based compensation of $0.1 million.
Current wording
Net cash used in financing activities during the six months ended June 30, 2025 was $3.7 million. During the six months ended June 30, 2025, we received net proceeds of $14.0 million from an underwritten public offering, made principal payments on our debt of $12.0 million, payments for debt modification of $0.2 million and made payments of taxes withheld through vested equity-based compensation of $0.1 million.
Previous wording
Net cash used in financing activities for the three months ended March 31, 2024 was $1.1 million. For the three months ended March 31, 2024, we made principal payments on our debt of $0.5 million and made payments of taxes withheld through vested equity-based compensation of $0.4 million.
Current wording
Net cash used in financing activities for the six months ended June 30, 2024 was $1.6 million. For the six months ended June 30, 2024, we made principal payments on our debt of $1.1 million and made payments of taxes withheld through vested equity-based compensation of $0.4 million.
Previous wording
In the quarter ended March 31, 2025, we sold the following quantities of our common stock pursuant to the ATM Agreement for total net proceeds of approximately $13 thousand:
Current wording
In the three and six months ended June 30, 2025, we sold the following quantities of our common stock pursuant to the ATM Agreement for total net proceeds of approximately $251 thousand and $264 thousand:
Previous wording
The carrying value of our total indebtedness was $73.5 million and $74.7 million, which includes unamortized deferred financing costs and issuance discount of $1.2 million and $1.0 million, and funds drawn on the revolving credit facility of $5.0 million and $5.0 million, as of March 31, 2025 and December 31, 2024, respectively.
Current wording
The carrying value of our total indebtedness was $57.7 million and $74.7 million, which includes unamortized deferred financing costs and issuance discount of $1.0 million and $1.0 million, and funds drawn on the revolving credit facility of $0.0 million and $5.0 million, as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
On September 13, 2024, the Company amended the Credit Agreement to modify certain financial condition covenants and the applicable margins. As such, for the period of September 13, 2024 through June 30, 2025, the applicable per annum margin is 2.5% or 3.5% for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 2.0x. If the Company's total leverage ratio is equal to or greater than 1.0x and less than 2.0x, the applicable per annum margin is 2.0% or 3.0% for base rate or SOFR, respectively. If the Company's total leverage ratio is below 1.0x, the applicable per annum margin is 1.5% or 2.5% for base rate or SOFR, respectively. As of March 31, 2025, the interest rate was 7.82%.
Current wording
On September 13, 2024, the Company amended the Credit Agreement to modify certain financial condition covenants and the applicable margins. As such, for the period of September 13, 2024 through June 30, 2025, the applicable per annum margin is 2.5% or 3.5% for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 2.0x. If the Company's total leverage ratio is equal to or greater than 1.0x and less than 2.0x, the applicable per annum margin is 2.0% or 3.0% for base rate or SOFR, respectively. If the Company's total leverage ratio is below 1.0x, the applicable per annum margin is 1.5% or 2.5% for base rate or SOFR, respectively. As of June 30, 2025, the interest rate was 7.83%.
Previous wording
In addition to revising the covenants listed above, the amendment revised or added new terms such that (i) for outstanding loans, beginning on or about July 1, 2025, the applicable per annum margin will be increased to 3.75% or 4.75% for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 3.00x, 3.50% or 4.50% for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 2.00x and less than 3.00x, and 3.25% or 4.25% for base rate or SOFR, respectively, if the Company's total leverage ratio is below 2.00x, (ii) the term loan and revolving credit facility will mature on May 11, 2027 (instead of November 7, 2027); (iii) Liquidity in excess of $3.0 million will be used to repay the outstanding funds drawn on the revolving credit facility on a monthly basis beginning April 30, 2025; (iv) revolver draws will be subject to compliance with the minimum Liquidity covenant; and (v) the Company will be required to reimburse SVB for certain fees and expenses relating to the engagement of a financial advisor, and (vi) 100% of first $10.0 million of any equity proceeds will be used to repay the term loan and revolving credit facility, subject to a carve-out of the first $3.0 million of equity proceeds and any equity proceeds received from Vesey Street Capital Partners, L.L.C., our private equity sponsor (“Sponsor”). In consideration of the Third Amendment, the Company paid a fee equal to 0.15% of the outstanding loans to consenting Lenders, and a $125,000 arrangement fee to SVB. On March 12, 2025, in connection with the Third Amendment, the Company, SVB and our Sponsor (through certain affiliated entities) entered into that certain Limited Guarantee by and among Vesey Street Capital Partners Healthcare
Current wording
In addition to revising the covenants listed above, the amendment revised or added new terms such that (i) for outstanding loans, beginning on or about July 1, 2025, the applicable per annum margin will be increased to 3.75% or 4.75% for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 3.00x, 3.50% or 4.50% for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 2.00x and less than 3.00x, and 3.25% or 4.25% for base rate or SOFR, respectively, if the Company's total leverage ratio is below 2.00x, (ii) the term loan and revolving credit facility will mature on May 11, 2027 (instead of November 7, 2027); (iii) Liquidity in excess of $3.0 million will be used to repay the outstanding funds drawn on the revolving credit facility on a monthly basis beginning April 30, 2025; (iv) revolver draws will be subject to compliance with the minimum Liquidity covenant; and (v) the Company will be required to reimburse SVB for certain fees and expenses relating to the engagement of a financial advisor, and (vi) 100% of first $10.0 million of any equity proceeds will be used to repay the term loan and revolving credit facility, subject to a carve-out of the first $3.0 million of equity proceeds and any equity proceeds received from Vesey Street Capital Partners, L.L.C., our private equity sponsor (“Sponsor”). In consideration of the Third Amendment, the Company paid a fee equal to 0.15% of the outstanding loans to consenting Lenders, and a $125,000 arrangement fee to SVB. On March 12, 2025, in connection with the Third Amendment, the Company, SVB and our Sponsor (through certain affiliated entities) entered into that certain Limited Guarantee by and among Vesey Street Capital Partners Healthcare Fund, L.P., Vesey Street Capital Partners Healthcare Fund-A, L.P., SVB, and the Company (the "Limited Guarantee"), pursuant to which our Sponsor agreed to provide a $10.0 million limited guaranty of the Company’s obligations under the Credit Agreement. The Limited Guarantee was callable on June 15, 2025 (or upon the earlier occurrence of certain defaults described therein) if the Company had not prepaid the term loan (excluding regularly scheduled amortization) by $10.0 million as of such date. Under the terms of the Limited Guarantee, if our Sponsor was required to make any payment under the Limited Guarantee (other than as a result of a bankruptcy event), then our Sponsor would be deemed to have purchased shares of common stock of the Company having an aggregate value equal to the amount of such payment. The Company agreed to issue a subordinated note to our Sponsor if a payment occurred under the Limited Guarantee, to the extent such payment did not result from the issuance of shares of common stock by the Company to our Sponsor.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
For the six months ended June 30, 2025 and 2024, we define same-center case and revenue growth as the growth in each of our cases and revenue at facilities that were owned and operated during the six months ended June 30, 2025 and 2024, respectively. At facilities that were not owned or operated for the entirety of the prior year period, the current year period has been pro-rated to reflect only growth experienced during the portion of the six months ended June 30, 2025 in which such facilities were owned and operated during the six months ended June 30, 2024. We define same-center facilities and procedure rooms based on if a facility was owned or operated as of June 30, 2024.
Current report — wording carried from elsewhere
The following table and notes summarize certain results from the statements of operations for each of the periods indicated and the changes between periods. The table also shows the percentage relationship to revenue for the periods indicated:
Current report — wording carried from elsewhere
Cost of Service—Our cost of service decreased $3.7 million, or 10.1%, compared to the six months ended June 30, 2024. The percentage decrease in cost of service is driven by the decrease in cases compared to the same period in 2024. Cost of service was 39.8% and 37.4% as a percentage of revenue for the twelve months ended June 30, 2025 and 2024, respectively. The percentage increase is primarily due to the decline in revenue and not being able to leverage certain fixed costs within cost of service such as rent and certain nursing costs.
Current report — wording carried from elsewhere
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Total selling expenses were approximately $19.5 million and $24.3 million for the six months ended June 30, 2025 and 2024, respectively. This decrease is primarily related to a decrease in advertising spend associated with brand awareness initiatives. Our customer acquisition costs were approximately $3,010 and $3,165 per customer in the six months ended June 30, 2025 and 2024, respectively. Additionally, selling expenses as a percentage of revenue may fluctuate from quarter to quarter based on the timing and scope of our initiatives and the related impact to our revenue. We have also paused de novo center and new procedure room openings, which is expected to have a favorable impact on selling expenses.
Current report — wording carried from elsewhere
Depreciation and Amortization—Depreciation and amortization increased to approximately $6.5 million for the six months ended June 30, 2025 compared to $5.7 million for the same period in 2024. This increase is the result of having five additional de novo centers during the six months ended June 30, 2025 as compared to the 2024 period.
Current report — wording carried from elsewhere
Income Tax Expense—Our effective tax rate is 13.8% and 5.4% for the six months ended June 30, 2025 and 2024, respectively. The main driver of the difference between the effective and statutory rate is non-deductible executive compensation under Section 162(m) of the Internal Revenue Code.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
(1) During the first quarter of fiscal year 2024, the Company recorded a cumulative reversal of stock compensation expense of $10.4 million related to reassessing the probability of achieving the performance target on certain of the Company's performance-based stock units. See Note 6 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for further discussion.
Previous report — wording carried elsewhere
Fund, L.P., Vesey Street Capital Partners Healthcare Fund-A, L.P., SVB, and the Company (the "Limited Guarantee"), pursuant to which our Sponsor agreed to provide a $10.0 million limited guaranty of the Company’s obligations under the Credit Agreement. The Limited Guarantee is callable on June 15, 2025 (or upon the earlier occurrence of certain defaults described therein) if the Company has not prepaid the term loan (excluding regularly scheduled amortization) by $10.0 million as of such date. The Company will utilize proceeds from operations and potential equity raises to prepay the $10.0 million on the term loan. Under the terms of the Limited Guarantee, if our Sponsor is required to make any payment under the Limited Guarantee (other than as a result of a bankruptcy event), then our Sponsor will be deemed to have purchased shares of common stock of the Company having an aggregate value equal to the amount of such payment. The Company has agreed to issue a subordinated note to our Sponsor if a payment occurs under the Limited Guarantee, to the extent such payment does not result from the issuance of shares of common stock by the Company to our Sponsor.